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greg

Member since: Mar 08
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Posted April 11, 2008 (05:25PM)

Background (oh no, not fundamentals!):  If the dollar's purchasing power falls, gold and silver will probably keep their value.  With our current national monetary policy of print-our-way-to-success, that sets the noble metals on a good upward trend.  But for the last 12 years of being a card carying Gold Bug, the last couple of years' volitality is pretty wild to me; great for options.  When viewed over a large time frame, I'm told that silver usually trades around 1/20th of gold; so today's $17/oz silver is very out of historic proportion with today's $925/oz gold (~1/54). 

 Play It:  I've chosen DBS to play bull-put credit spreads on.  The volitality has given the OTM one/two point spreads a nice return on an ETF that has an upward trend politically built-in.  Silver seems to be proving its line of support right now after last month's correction.

Talk me out of it?
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joann333

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Posted April 12, 2008 (12:13AM)

Greg,

 I am not knowledgable enough to talk you out it, but what do you consider as good plays/criteria in silver/precious metal area for a buy and hold strategy?  I am just beginning to study the precious metal market - focusing mainly on uranium.

Thanks
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djk

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Posted April 12, 2008 (03:06AM)
should work if price of silver is actually setting a bottom for the next leg of the bull run (I hope so). However there seems to be as many people saying it will test 15 again as those who say time to go to 21 again. Joann,  it would be nice to have any uranium info you have added to the group.
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greg

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Posted April 12, 2008 (03:34AM)

It depends on how long-term you're thinking.  But gold spot prices are predictable at psychological levels.  Gold hit $1000/oz, and the profit taking started; gold punched down to where it is (joined by silver), but has held there for long enough for me to re-enter.  I've had success buying on the corrections, like what's going on right now.  Buy most of my positions used to be ridiculously long-term (wealth preservation, not growth), which is why I'm enjoying credit spreads right now. 

The problem with most gold bugs is that our capital is locked up for the next generation, leaving all the good short/intermediate profit options for someone else.  So I'm new at this too.  And I've never put money in uranium, but during its recent and crazy run-up, a good source for news on this metal was the Korelin Economics Report (KEreport.com), and their weekly summary podcast (KEreport.com/KorelinPod.xml).

What I'd like to find is an instrument that closely follows the spot prices, but will allow LEAPS.  I'm not trading on margin, but if I were, naked puts that are just a pinch out of the money would also be good to sell.  Any ideas?
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joann333

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Posted April 12, 2008 (04:12AM)

djk, I  don't have too much info on uranium yet, but am researching companies that can be purchased on the American exchanges - due to the price of trading on tsx.

 My first purchase, through another broker, was USU at 5.17. I made this decision based on low P/CF, P/S, P/B - and the assets that the company owns. I am not sure if it was a good decision, but I needed to jump in.

greg, thanks for the link.